#CULUTURESHIFT2030 STRATEGY
Three years ago we began our #cultureshift2030 strategy, gathering all our decades of experience to move us into a new era. We focused on using the depth of our knowledge about South Africa’s public service to help our auditees improve their performance, accountability, transparency and integrity (Pati) to better serve the people of South Africa.
Strategic aspiration
Through the #cultureshift2030 strategy, we aspire to have a stronger, more direct and consistent impact that should help create a public sector with a culture characterised by the Pati indicators. This means going beyond simple, occasional compliance with rules, and extends towards appreciating and normalising the outcomes for which the rules exist.
Our strategic aspiration is rooted in section 195 of the Constitution, which defines public administration as governed by the democratic values and principles enshrined in the rest of the Constitution. It is a public service that:
- promotes and maintains a high standard of professional ethics
- promotes efficient, economic and effective use of resources
- creates a public administration that is development oriented
- provides services impartially, fairly, equitably and without bias
- responds to people’s needs and encourages the public to participate in policy making
- accounts for its public administration
- fosters transparency by providing the public with timely, accessible and accurate information
- cultivates good management and career development practices to maximise human potential
- represents the South African people, with employment and personnel management practices based on ability, objectivity, fairness and the need to redress the imbalances of the past to achieve broad representation.
So, as we implement the strategy annually, we keep our aspiration and principles at the forefront of all our work. These inform our medium-term strategic planning, our annual organisational scorecard and all our related operations.
Strategic goals
Strategic goal 1: Shift public sector culture
Move a critical mass of auditees towards organisational cultures that are predominated by behaviours that reflect performance, transparency, integrity and accountability.
The primary performance outcome of this strategic goal and its related objective is the movement of a critical mass of our auditees along the culture shift continuum (depicted below) towards the Doing Good category.
AGSA culture shift continuum
A critical assumption inherent in the culture shift continuum is that the further to the right an auditee moves in the continuum, the more the auditee’s developmental impact on society improves.
Therefore, as more auditees shift to the right of the continuum, we will fulfil our strategic aspiration of making a more direct, stronger and consistent impact on improving the lived reality of South Africans.
Strategic goal 2: Insight
Generate insights that illuminate understanding, drive action and yield results
The best chance of success on strategic goal 1 objectives relies on our ability to provide our auditees with clear, relevant and actionable audit insight. For us, the real test of the extent to which we have generated and delivered insight that illuminates understanding, drives action and yields results, is what our auditees do with the insight and the extent to which our insight goes on to affect their work. Therefore, the key indicator for the insight goal and objective rests on the extent to which our audit insight, messaging and recommendations have been taken to their natural conclusion (i.e. our performance adds value to auditees) through auditee action (e.g. mandate- related service delivery).
Strategic goal 3: Influence
Move stakeholders from mere awareness of our messaging to action and advocacy
Our influence is not merely in audit stakeholder engagements and management. The cycle of ongoing influence begins with audit planning, during which we identify the key risk areas and focus areas of our audits. During the audits, our teams engage with both clients and stakeholders, which gives us an opportunity to influence both. Following our audits, we consolidate our findings into key messages that we package into various mediums, including management reports, general reports and presentations. As we distribute these key messages, our aim is to not only create awareness among stakeholders, but to also move these stakeholders to take the necessary action and, eventually, become advocates of our messages.
Strategic goal 4: Enforcement
Apply our powers to directly or indirectly recover resources lost to the state and taxpayers and ensure the application of consequences for wrongdoing
This strategic goal focuses on the results of implementing the MI provisions of the PAA. Our audit recommendations encourage our auditees to recover losses and prevent further losses. Where we have notified accounting officers or authorities of an MI and they fail to take swift action, we can use remedial and referral powers or issue a certificate of debt. In cases not involving financial loss,
MI regulation 11 provides for further appropriate action, including legal action.
Material irregularity (MI)
Encompasses financial mismanagement, maladministration and serious breaches of duties that could result in a significant loss or misuse of financial or public resources, or harm to the public or a public institution.
Strategic goal 5: Sustainably
Unlock latent capacity in the existing resource base and lower the cost and effort with which we derive each marginal unit of quality, insight, influence and enforcement
This strategic goal aims to set targeted performance standards for how our operational machinery makes use of its key resources – primarily people, time, finances and methodology – to produce outputs that meet the desired standards.
Strategic goal 6: Efficiently
Unlock latent capacity in the existing resource base and lower the cost and effort with which we derive each marginal unit of quality, insight, influence and enforcement and acquire, develop and maintain the quantity, quality and configuration of resources, and capabilities to achieve and sustain our desired levels of impact.
One of our strategic priorities is to run the business efficiently – meaning we use the least amount of time and resources possible to produce all our work, without affecting the quality. This applies to both the audit and corporate services sides of our organisation. Key to deriving such efficiency will be our ability to digitally transform our core processes and be as systems-driven as possible. We want to leverage the digital tools that we will roll out over the next three years to help drive the organisation’s increased productivity, without compromising on staff wellbeing.
Operating context
In the 2023-24 financial year, a tough fiscal and governance environment persisted.
The audit outcomes of national and provincial auditees saw some improvement but there was limited overall progress in the audit outcomes of local government auditees. Across all three spheres of government, we observed weaknesses in service delivery planning, reporting and achievement; failing infrastructure; and increasing pressure on government finances due to a lack of prudence in spending practices.
The ongoing misuse of state resources was another challenge that continued to have a profound impact on us as the assurer of financial spend in the public service. We saw a national focus on corruption and its negative impact on the economic standing of the country, the lived experiences of citizens, as well as our local, regional and international reputation. This perpetuated difficult and unequal living conditions, something which goes to the heart of our strategy. To help address the situation, we acknowledged several recommendations from the final report of the Judicial Commission of Inquiry into Allegations of State Capture and implemented these in 2023-24. Of the 27 recommendations and actions relating to us, more than half (62%) have already been completed. We will spend 2024-25 and the next few years to complete the rest.
Other external factors that had a strong impact on our work included an emerging trend of political coalitions in the auditee landscape, especially at local government level. This is a trend that impacts the work of the AGSA, as we audit the spaces in which these coalition alliances come into political and administrative power. The main risk that emerges for our audit work is the inherent instability that coalition arrangements tend to bring, especially at a local government level, due to the frequent changes in coalition partners and leadership. This makes it difficult for us to work with the affected administration authorities in a consistent manner, aimed at ensuring the sustained improvement of their financial systems and, eventually, their performance.
The tough economic conditions in our external environment had a profound impact on our internal operations. One of the major effects of this was the difficulty our auditees had in paying our audit fees timeously, requiring our audit and finance teams to increase their focus on effective debt-collection mechanisms. Besides these economic conditions that our business had to contend with, we also dealt with matters such as changes in audit standards and some remaining backlog audits, caused by the late submission of financial statements by auditees.
Internally, our operating context was significantly better but still not without challenges that we had to manage effectively. Our highly professional staff continued to implement our strategy with care and rigour, despite challenging auditee environments, and developed strategies to help safeguard us against our auditees’ financial challenges.
Technology continued to play a critical role in our internal operations. As indicated when we began our digital transformation journey a few years ago, the benefits that digitisation brings to auditing are immense. They go beyond helping to create audit process efficiencies and eventual cost reductions. Digitisation also has the potential to improve the quality of audits (reduction of human error), allowing auditors to focus on elevating their analytical skills and insights as manual processes decrease. With our audit software project approved in 2023-24, we are well on our way to creating more audit and business efficiencies.
Our internal organisational strengths and opportunities improved our key audit products, as did our focus on identifying, implementing and monitoring effective mitigations to risks. We also focused on stakeholder feedback, both internally and externally, on key matters such as our ethics, our understanding and servicing of external stakeholder needs, and employee engagement and organisational culture.
Another major focus was to ensure that we better leverage our capitals using initiatives such as reviewing our office setups across the country to make our manufactured capital more financially sustainable and fit for our current and future configuration.